HONG KONG, Sept. 9 /PRNewswire-Asia/ --
Results Summary Six months ended June 30th (unaudited)
HK$ 000' 2008 2009
Revenue 426,596 437,358
Gross Profit 76,096 173,833
Profit for the year 45,869 306,936
EPS-Continuing Operation
(Basic) HK 3.27 cents HK 2.13 cents
EPS-Discontinuing Operation
(Basic) HK (0.71) cents HK 6.54 cents
EPS-Continuing Operation
(Diluted) N/A HK 2.11 cents
EPS-Discontinuing Operation
(Diluted) N/A HK 6.48 cents
China Haidian Holdings Limited (HKEx: 256, or the "Group") announced today
its unaudited results for the six months ended June 30 2009.
For the six months ended 30 June 2009, the Group recorded an unaudited
revenue (including continuing and discontinued operations) of approximately
HK$441,894,000 (Six months ended 30 June 2008: HK$446,921,000), representing a
decrease of HK$5,027,000 compared with the corresponding period last year. Net
Profit attributable to equity holders for the period was approximately
HK$306,926,000, representing an increase of HK$261,057,000 compared with the
corresponding period last year. Having set apart the financial impact of the
discontinued operations for the period of HK$231,494,000, the Group should
have an increase of net profit of HK$16,814,000 from its continuing operations
compared with the net profit last period.
Watches and timepieces business
EBOHR Luxuries International Company Limited ("EBOHR", a wholly-owned
subsidiary of the Group) achieved satisfactory results in the first half of
2009. Interim revenue from this company increased by 31% to HK$119,502,000
(2008: HK$91,047,000), largely attributable to a sustained momentum in revenue
growth and successful strategy to develop existing and new proprietary brands,
with unique strategies and positions for individual brand names.
The successful introduction of "PAMA," a new line of product introduced in
2008 focusing on top tier customers, and "KANA," introduced in 2009 targeting
white collar female clientele, has contributed to the further increase in
revenue and post-tax net profit. In addition to existing marketing initiatives,
special promotional efforts have been deployed to further enhance brand
awareness across the PRC but especially amongst second and third tier cities.
The Group will continue to revise its strategy of recruiting authorized
dealers to increase the number of distribution outlets while ongoing training
of sales professionals is expected to improve the overall effectiveness of
distribution outlets.
The Group is planning to set up ten boutiques in the next two years under
the EBOHR brand for retail distribution of its proprietary brand watches
(under the brand names of PAMA, KANA, and others). Investment into each
boutique is estimated to be approximately RMB1 million, with a total
investment of approximately RMB10 million for all ten boutiques. The Group has
also recently established a wholly-owned subsidiary through EBOHR in
Switzerland, and shall soon commence marketing Swiss-made watches under
EBOHR's designated brand names as well as PRC-made watches with sophisticated
mechanical movement. At the same time, Swiss-made watches under EBOHR's
designated brand names would also be sold through local distribution channels.
Zhuhai Rossini Watch Industry Ltd. ("Rossini") also achieved satisfactory
result in the first half of 2009. Revenue reached HK$124,051,000. Net profit
after tax for the first half of 2009 was HK$29,408,000.
During the review period, the Group has focused on expanding the
distribution network for Rossini through department stores. Working closely
with its regional sale managers, Rossini has consolidated the distribution
outlets in first tier cities and increased the number of distribution outlets
in second and third tier cities. Fifty more outlets have been added in the PRC
in the first half of 2009. While firmly established in the market segment for
watches approximately RMB3,000, the Group is delighted to report that Rossini
has expanded its presence into other areas such as the luxury segment and the
specialist segment, which includes the tourbillion watches. The objective is
to strengthen recurring income generated by the Group's established position
in the market for products of approximately RMB3,000, while developing
additional income streams from targeted new segments, leveraging on the
comprehensive distribution network and wide range of quality products.
Having made significant restructuring, Rossini has improved it
manufacturing, operation, sales and marketing processes since integrating with
the Group. Amongst these improvements, Rossini has recruited watch designers
from leading schools in Mainland China and watch designers from Hong Kong to
develop new product lines. These new lines reflect the current international
trends yet also take into account the unique preferences of the local PRC
market. With a growing economy, improving standard of living, expanding
targeted markets coupled with a comprehensive distribution network and high
quality products, demand for Rossini's watches is expected to be substantial
and sustainable.
Copper Wire Business
Both Fuzhou Dartong and Jiangsu Dartong showed satisfactory performance in
spite of the global financial crisis during the review period. Fuzhou Dartong
Mechanic and Electronic Company Ltd. ("Fuzhou Dartong") contributed revenue
and net profit after tax of approximately HK$191,061,000 and HK$ 6,664,000
respectively. On the other hand, Jiangsu Dartong Mechanic and Electronic
Company Ltd. ("Jiangsu Dartong"), incurred approximately HK$2,586,000 in
losses to the Group in the first half of 2009.
Income from Other Investments
As of 30 June 2009, the Group owned 90,619,301 shares, or 14.78% of the
total capital of Citychamp Dartong. The Group's interest in Citychamp Dartong
contributed a cash dividend income of HK$8,238,000 during the interim period.
The recurring annual dividends from Citychamp Dartong will provide a recurring
source of profit contribution to the Group.
The Group's portfolio of properties has been leased out. These properties
in Guangdong Province and Hong Kong contribute a stable rental income to the
Group for the period under review.
Discontinued Operation -- Timber Plant in Shenzhen
The Group received from the Shenzhen Government the compensation of RMB716
million, being 89.5% of the proceeds from the sale of the land. While
approximately 50% of the gain from the land auction and resumption has been
accounted for in 2008, the remaining 50% was fully reflected in the first half
of 2009. The Group recognised gains on disposal before tax of HK$317,227,000
in 2008 and HK$309,799,000 in the first half of 2009; gains on disposal after
tax was HK$278,006,000 and HK$248,131,000 respectively.
A joint venture that is 70% owned by Citychamp Dartong Company Limited and
30% owned by the Group acquired the land and will develop the land into a
residential, commercial, office and hotel complex with total gross floor area
of 205,693 sq.m. The Group's share of registered capital of the joint venture
and the consideration of the land will be RMB270 million in aggregate and
there was no other funding requirement from the Group for the development.
In view of the stable land and property market in Shenzhen, the outlook
for the real estate development and for the resale value of the land is
considered satisfactory.
Outlook
The Group aspires to be one of the leading watch manufacturers and
distributors in Mainland China, and is committed to building a portfolio of
extensive products and markets through various watch-related companies.
Since the reporting period, the Group has successfully acquired Shenzhen
Permanence Commerce Co., Ltd ("Permanence"), a company focusing on
distribution of leading Japanese watches such as Citizen and Casio and other
foreign brands, on 16 July, 2009. Permanence currently owns distribution
rights to 30 outlets with over 40 wholesalers. Permanence has secured the
exclusive distribution rights for Citizen in Sichuan, Fujian, and Shanxi
Provinces as well as Chongqing City, and the right to distribute the Casio
brand name all over Mainland China. It can also can source for all its own
distribution outlets all over the Mainland China from Casio. While providing
an additional distribution network for the Group's own watch brands,
Permanence will also generate revenue through the distribution of other well-
known foreign brands. Given the good relationship with well-known foreign
brands and the outlet providers, revenue from Permanence and its outlets is
expected to increase rapidly in the next two years, as a significant revenue
and profit driver for the Group from the second half of 2009 and onwards.
Mr. Hon Kwok Lung, Chairman of the Group, commented, "The Group intends to
achieve organic growth both internally and externally. While there are
tremendous initiatives for internal growth of EBOHR and Rossini, the Group
also intends to grow through acquisitions. The growth strategy of acquiring
Permanence, as an example, is paying off. Through Permanence, the Group has
quickly increased the number of its distribution outlets, and, more
importantly, gained access to more proprietary and non-proprietary brands for
distribution, hence generating an increasingly strong revenue. The acquisition
is only the beginning of a series of intended acquisitions for local watch
companies and watch mechanical movement manufacturing companies. The Group has
in-depth discussions with local watch companies and watch mechanical movement
manufacturing companies."
Mr. Hon continued, "Looking ahead, the Group will continue to focus on an
organic growth strategy through the existing watch entities. Given the
relatively stable economic growth of the Mainland China, the core business
segment of watches and timepieces, and a relatively stable income stream from
other non-core business in enameled copper wires and real estate investment,
we shall remain open to acquisition opportunities both in Mainland China and
overseas, at a fair value and in line with the Group's strategy. The ultimate
goal is to build a comprehensive portfolio of companies specializing in
manufacturing watches and mechanical movement and distribution of the
proprietary brands and non-proprietary brands in Mainland China and overseas."
For media inquiries, please contact:
Stimulus Investor Relations Ltd.
Contact: Karen Lau / Alex Wong
Tel: +852-9311-1791 / +852-6899-0255
Email: karen@stimulus-ir.com / alex@stimulus-ir.com
About China Haidian Holdings:
China Haidian has focused on developing its watch business in China into a
sizable enterprise, with large-scale manufacturing facilities and a portfolio
of notable brands with an extensive network of retail points in China.
The two leading watch brands of Group's high-growth business, "EBOHR" and
"Rossini," are amongst the top four Chinese brands and have been recognized as
two of "China's 500 Most Valuable Brands 2008" and "Asia's 500 Most
Influential Brands 2008" by the World Brand Laboratory. The two brands are
valued at RMB 1.6 billion and 1.6 million, and are catalytic to the Group's
rapid growth, ahead of industry peers.
As of end of October 2008, EBOHR and Rossini's sales volumes have taken
the top and second spots in China with market shares of 10.36% and 12.19%
respectively. Sales revenues are also ranked well within the top ten,
accounting for 46% of China's watch-manufacturing market. The Group's goal is
to establish a leading market position through broadening its product mix and
market through acquisition of other brands and distribution channels.
